EXHIBIT 10.1
GLOBAL ACCOUNT TERMS
DEPOSIT ACCOUNT AGREEMENT
The Bank of New York, in its capacity as trustee of the
CurrencyShares
British Pound Trust, a trust formed under New York law (the
"Customer" or
"Trust") and the London Branch of JPMorgan Chase Bank, N.A. (the
"Bank")
undertake to comply with and be bound by the following Global
Account Terms of
this Deposit Account Agreement (the "Agreement").
ESTABLISHING ACCOUNTS
1.1
The Customer's British Pound-denominated, (i) interest-bearing
account (the
"Interest Account") and (ii) non interest-bearing account ( the
"Non-Interest Account") (each individually the "Account" and
collectively
the "Accounts") maintained with the Bank shall be subject to these
Global
Account Terms (the "Account Terms") and the Account Application and
the
Signature List executed by the Customer regarding the Accounts
attached
hereto (together, the "Account Applications"); and, by continuing
to use
the Accounts, the Customer acknowledges its acceptance of these
Account
Terms and the relevant Account Applications.
1.2
Unless otherwise specified, the Customer will establish the
Accounts as
principal. The Customer shall not transfer any of its rights and
interests
in the Accounts nor create any form of security interest over such
rights
and interests without the prior written consent of the Bank.
1.3
The Customer represents and warrants that it has power and capacity
to open
and operate the Accounts, that the Account Terms and the relevant
Account
Applications constitute valid and binding obligations of the
Customer and
that the Customer has taken all necessary actions to duly authorize
the
execution and delivery of the same.
SIGNATORIES
2.1
"Signatory" means a person named in the relevant Account
Application (or
other analogous document under which the Customer authorises
persons to
communicate with the Bank in relation to the Accounts) who is
authorised to
act on behalf of the Customer at the time of the relevant
Instruction (as
defined in Section 4.1) and in respect of the matters set out in
clause 3
below.
2.2
The Bank may treat any Signatory as duly authorised to issue
Instructions
until the Bank receives written notice from the Customer, after
which the
Bank shall act promptly, that the Signatory no longer has the
authority to
issue Instructions.
2.3
The Customer will provide specimen signatures (including specimens
of
facsimile signatures and/or personal seals) to the Bank (in the
Account
Application or otherwise) in the number and form required and will
verify
the identity of each Signatory in a manner required by the Bank.
AUTHORITY OF SIGNATORIES
3.1
Each Signatory, subject to any written limitation received by the
Bank from
the Customer, is authorised on behalf of the Customer to:
(a)
open, operate and close the Accounts;
(b)
appoint and remove Signatories;
(c)
execute the Account Application(s) and any form of agreement
relating
to communications, whether by telephone, telex, electronic or other
means;
(d)
execute any agreements relating to overdrafts, borrowings or cash
management;
(e)
draw, accept, endorse or discount cheques, drafts, bills of
exchange,
notes and other instruments;
(f)
overdraw the Accounts as may be permitted by the Bank;
(g)
make arrangements with the Bank concerning periodic payments into
or
out of the Accounts;
(h)
advise the Bank of credits destined for the Customer's Account;
(i)
place money on interest-bearing or term deposit with the Bank and
withdraw that money and accrued interest either on or before any
applicable maturity date;
(j)
authorize and request the Bank to effect foreign exchange
transactions
and purchase and/or sell treasury products for the account of the
Customer;
(k)
deposit any property of the Customer with the Bank for safe
keeping,
have access to and reclaim any property so deposited or give the
Bank
Instructions in relation to it;
(l)
execute guarantees, indemnities or other undertakings to the Bank
in
relation to:
(i)
missing documents;
(ii)
guarantees, letters of credit or other undertakings given or to
be given by the Bank to or at the request of the Customer; or
(iii) anything else done or to be done by the Bank at the request
of
the Customer;
(m)
give the Bank any form of security over, or make any other
arrangements with the Bank concerning, any property of the Customer
including without limitation bills of exchange, bills of lading,
warehouse certificates, insurance policies and share and debenture
certificates;
2
(n)
countermand, revoke or amend Instructions; and
(o)
give the Bank Instructions relating to any of the above.
INSTRUCTIONS
4.1
"Instruction" means a communication, including without limitation a
cheque
or demand for payment, which (i) contains the information required
by the
Bank to enable the Bank to give effect to the communication; (ii)
is
received by the Bank in writing, by facsimile, tested or untested
telex,
SWIFT, telephone, or via the Bank's electronic instruction system
or such
other means as are for the time being agreed by the Customer and
the Bank;
and (iii) the Bank believes in good faith to have been given by the
Customer.
4.2
The Customer is responsible for keeping and completing cheques and
other
forms and documents and for issuing Instructions in a manner so as
to
prevent unauthorised completion, alterations or additions. The
Customer
shall not issue cheques which are post- dated and shall immediately
notify
the Bank if it becomes aware that any of its cheques (whether
completed or
blank) are lost or stolen.
4.3
If the Bank and the Customer at any time agree on a security
procedure to
be used in relation to any category of communications (including
encryption), the Customer shall safeguard any test keys, passwords,
identification codes or other security or authentication devices,
make them
available only to properly authorised persons and be fully
responsible for
any use of such security procedure (whether authorised or
unauthorised)
4.4
Nothing in this Clause 4 obligates the Bank to confirm Instructions
which
appear to the Bank acting in good faith to have been given by the
Customer.
AUTHORITY AND OBLIGATIONS OF THE BAN
5.1. The Bank is authorised and agrees to accept, honour and
execute without
inquiry each Instruction which the Bank believes in good faith to
have been
given by a Signatory and any other Instruction communicated by
other means
which the Bank receives in strict accordance with any agreed
security
procedure. Provided the Bank believes in good faith that an
Instruction has
been given by a Signatory, where such an Instruction has been
effected by
means of a facsimile signature, personal seal or chop, the Bank is
authorised to act on such Instruction, regardless of by whom the
facsimile
signature, personal seal or chop was actually affixed. The Bank
need not
inquire into the circumstances of any transaction.
5.2
The Bank may at its option use any means to confirm or clarify
Instructions, even if any agreed security procedure appears to have
been
followed. If the Bank is not satisfied with any confirmation or
clarification, it may decline to honour the Instruction.
5.3
The Bank has established cut-off times for some categories of
communications, details of which are attached hereto as Addendum A.
If an
Instruction is received by the Bank after its cut-off times, the
Bank may
process the Instruction on the next day on which it is open for
such
business. The Bank may process any Instruction through any of the
payments
systems identified in Addendum A.
3
5.4
Execution of Instructions will be subject to applicable law and the
rules
of the payment system used, including those laws or rules
concerning a
misdescribed or missing beneficiary, beneficiary's bank or
intermediary
bank. The Bank may rely on the identifying number of any account,
intermediary or beneficiary's bank which appears in an Instruction
as the
proper identification of the beneficiary, intermediary or
beneficiary's
bank notwithstanding that the Instruction identifies an entity
different
from the entity identified by name in the Instruction. The Bank may
complete or correct incomplete or inaccurate intermediary or
beneficiary
bank details.
5.5
Due to the operations of the Trust, mid-month redemptions of shares
of the
Trust could result in an Instruction that would require a
withdrawal from
the Non-Interest Account in excess of the balance in such account.
The Bank
shall honour such an Instruction without assessing an overdraft
fee. They
Bank may charge customary interest, fees and other expenses for all
other
overdrafts of the Non-Interest Account or the Interest Account.
5.6
Where execution of an Instruction requires the Bank to purchase or
sell a
currency other than the currency of the Account on which the
Instruction is
given, the Bank is authorised to purchase or sell the currency at a
commercially reasonable rate at the relevant time for the purchase
or sale
of such currency taking into account the size and tenor of the
transaction.
5.7
If the Customer chooses to confirm any Instruction, any
confirmation must
be clearly marked as such and, if there is any discrepancy between
an
Instruction and any confirmation, the terms of the Instruction
shall
prevail.
DEPOSITS, AVAILABILITY OF FUNDS
6.1
The Customer undertakes that it will have good title to all items
presented
to the Bank for deposit or for any other purpose. Money deposited
or paid
into an Account will not be regarded as available until collected
and
irrevocably received in cleared funds. The Customer requests that
the Bank
accept without inquiry all cheques and other instruments presented
for
deposit into the Account without checking whether they are valid,
properly
endorsed or owned by the Customer.
6.2
As collecting bank, the Bank as agent for the Customer will deal
with and
present the cheques and instruments in accordance with the custom
and
practice of the country in which the cheques are collected.
6.3
If the Bank credits the Account in contemplation of receiving funds
for the
Customer's credit and those funds are not actually received by the
Bank, or
on the faith of a transaction which is subsequently set aside or
revoked,
or if the Bank does not receive funds for the Customer's credit for
value
on the date advised by or on behalf of the Customer, the Bank shall
be
entitled to debit the Account of the Customer with the amount
previously
credited and/or with any other charges incurred. If the Account
becomes
overdrawn or further overdrawn as a result of such debit, the
Customer will
pay on demand the overdrawn amount and interest on the overdrawn
amount.
6.4
Bank reserves the right not to accept, and to return without
interest to
the remitter of funds, the amounts received for deposit to the
Interest
Account on any Bank business day, if the
4
aggregate deposit liability of the Bank to the Trust following the
deposit
of such amounts would exceed the British Pound equivalent of $4.0
billion
U.S. dollars calculated at the Federal Reserve Bank of New York
Noon Buying
Rate (the "Noon Buying Rate") for the British Pound or another
recognized
market rate for the British Pound if the Noon Buying Rate is not
available
on the banking day such deposits are received by the Bank.
6.5
The Bank shall notify the Customer and the Customer's sponsor if
there are
extraordinary circumstances causing the Bank to reasonably expect
that it
will be unable to accept Instructions for the withdrawal of money
held in
the Accounts. Upon such notification, the Customer may determine,
in its
sole discretion, to suspend generally or refuse orders to redeem
shares of
the Trust. In such case, the Customer and the Bank shall consult
with each
other and use good faith efforts to resume withdrawals as soon as
possible.
6.6
Each day that orders are placed with and accepted by the Trust for
the
purchase or redemption of shares in the Trust, the Trust shall
notify the
Bank of the anticipated amounts in British Pounds that will be
deposited
to, or withdrawn from, the Interest Account on the settlement date
for
those orders.
INTEREST
7.1
Interest will accrue daily, in British Pounds, on all British Pound
balances in the Interest Account only and will be credited monthly,
in
